Moving the point along projection of the edge
If I've understood you correctly, a quite fast way to this move is:

Set your Pivot to 'Active Element'
Select your moving vertex, and then your static vertex, so static is active.
use S, ShiftZ to scale the moving vertex to the static vertex in XY.

But a better way (among many) to retopologize, if that's what you are doing,  would be to construct your low-poly mesh edges in plan view, in a plane above the terrain, without regard to the height of the vertices.
Then when you are happy with the XY form, from top orthographic, set Snap to 'Face' and 'Project Individual Elements', and hit G. The entire low-poly surface will then snap down, conforming to the high-poly mesh below.